The Surface Transportation Board has scheduled a hearing for April 26-27 in response to a letter sent by the National Grain and Feed Association regarding deteriorating rail service.
the March 24 letter has gained support from various railway unions and other stakeholders in recent days. These stakeholders are also asking the STB to examine the causes of service delays.
Here is a summary of what has been said recently:
Unions criticize staff cuts and blame service problems on lack of adequate staff
According to recent correspondence to the STB, railroad unions cite Precision Scheduled Railroading (PSR) as the cause of many of the service issues occurring today.
In a letter to the board on Monday, the AFL-CIO’s Transport Trades Department (TTD) said it agreed with the NGFA’s assessment of deteriorating service conditions on Union Pacific (NYSE: UNP), BNSF (NYSE: BRK.B) and Norfolk. South (NYSE: NSC). The union said PSR, an approach that aims to streamline operations, “looms large in disruption [NGFA] members are currently facing.
According to TTD’s letter signed by its chairman, Greg Regan, PSR encouraged the railroads to reduce staffing, including staffing of market-sensitive trains and locomotives. But when demand rebounded, the railroads didn’t have enough workers to handle demand, Regan said.
“NGFA cites that the lack of available crews has caused long delays. This should come as no surprise, as carriers have spent the past few years cutting tens of thousands of jobs across all trades, regardless of the impact this would have on service delivery, quality or frequency.” , said Regan.
He said that to compensate for the downsizing, absence policies adopted by some railroads have become punitive.
“Rather than pursuing real measures to bring the workforce back to appropriate levels, the carriers have instead focused on extracting maximum hours from the existing workforce under threat of disciplinary action and dismissal,” Regan said.
“In an industry where fatigue is already rampant, further increasing the workload of existing employees is simply unsustainable. Not only do these policies invite new safety risks into the system, but they directly contribute to the degradation of old good jobs on the railroad,” he continued, noting that there have been “ several hundred BNSF resignations” in response to the new attendance policy. which came into effect on February 1.
In a letter dated April 1 on the board, SMART-Transportation Division President Jeremy Ferguson also said that the deterioration in service as described by NGFA is attributable to staff reductions that have occurred as a result of the implementation of the PSR.
“Put simply, the railways cannot maintain the same level of production as before the advent of PSR given the number of drastic cuts they have made to their systems. At this point, approximately 33% of the U.S. railroad workforce has been laid off with the initial implementation of PSR, with thousands of locomotives in storage,” Ferguson said. “This has resulted in a fundamental problem – there are not enough staff, nor locomotives available to operate the necessary number of trains required to provide a level of service equal to the current level of demand.”
Ferguson also suggested that the slower train speeds are due to railroads looking to save on fuel costs by reducing horsepower and using fewer locomotives. This leads to a snowball effect since fewer locomotives means fewer but longer trains.
“Fewer trains mean longer journeys [lineups of railcars and locomotives]. A longer dial means more congestion. And more congestion means fewer predictive work cycles and longer working hours for teams (less uptime). All of this results in much slower speeds in the systems,” Ferguson said. “This puts more pressure on the managers responsible for moving trains and given that they are rewarded for arrival at the terminal and not for customer service under the PSR, industries dependent on the railways service are abandoned.”
Service interruptions also affect ethanol and coal: Growth Energy and Sen. Captain
The service issues faced by the US grain industry extend to other commodities as well, say letters from Growth Energy and Sen. Shelley Moore Capito, DW.Va.
In a Friday letter On the board, Chris Bliley, senior vice president of regulatory affairs for Growth Energy, a trade association representing 89 ethanol producers, said producers have had to cut production while waiting for delayed empty cars to arrive. Once the ethanol is on the train, there are average delays between two and four days for manifests and unit trains, although some delays have been as long as five to 12 days.
“While we certainly understand that a variety of factors have contributed to these rail disruptions, it is imperative that every possible step is taken by the country’s railways to ensure that these critical fuel supplies are immediately prioritized and reach the markets as quickly as possible. Further delays could not only impact our industry, but could ultimately increase fuel costs for American drivers,” Bliley said.
Meanwhile, a letter dated March 29 Capito said West Virginia coal producers don’t have enough railcars to ship thermal and metallurgical coal for export. She asked the STB to “review the car shortage and its impact on shipments.”
BNSF Resolves Service Issues and NGFA Concerns
In response to NGFA’s concerns, BNSF said it was implementing a number of initiatives to fully restore service to grain shippers, according to a March 30 letter by BNSF President and CEO Katie Farmer to NGFA President and CEO Michael Seyfert.
Farmer acknowledged that the railroad “is not currently meeting the service expectations of our customers.” But it is taking “aggressive action” to address service issues, such as providing weekly service updates and seeking to hire 1,000 more train, yard and engine workers in 2022 to increase crew availability.
The BNSF also recalled all previously furloughed train, yard and engine workers, including those in major grain destination regions of the Pacific Northwest and California. Significant monetary incentives are also offered to those who want to move to high-demand areas, Farmer said.
The BNSF also has measures to increase equipment resources to ensure adequate power supply. The western U.S. carrier added more than 250 locomotives to its active fleet over the winter, and plans to add 100 more in the coming weeks, according to Farmer.
“We’ve increased resources in our locomotive shops to improve maintenance and repair cycle times and get these units back online faster,” Farmer said. “These actions will help ensure that we have additional locomotives above our projected need threshold in position to keep trains moving and reduce the total number of cars in line.”
BNSF is looking to better manage car inventory by reducing network inventory levels by 2%. While this may lead to short-term capacity constraints, the long-term benefit will be improved fluidity and speed. BNSF would work with individual shippers to identify unproductive cars, Farmer said.
Customers also have access to technology tools that provide visibility into where shipments are.
“Let me reiterate that we are acutely aware of the effects our service challenges have had on your members. BNSF is committed to working non-stop until our network is fully restored and we are providing a service that helps your members – and all of our customers – grow and prosper,” Farmer said.
Click here for more FreightWaves articles by Joanna Marsh.
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